01-32_GENERALS_SUMMER25_PT - Flipbook - Page 28
ADVOCACY
most common causes of dispute after the
contract is awarded. Of course, such lack
of clarity can be an opportunity to seek
profitable extras — but not without the
risk of a hard-fought dispute as to whether or not you are entitled to such extra
compensation. Is it worth the risk to let
fate run its course by intentionally failing
to identify ambiguities, inconsistencies,
discrepancies, and lack of coordination
prior to submitting your bid?
Some critical questions to ask before
submitting a bid:
Has the owner provided a complete and
coordinated drawing package?
Are the specifications consistent with
the drawings? Most typical construction contracts state that specifications’
interpretation supersedes that of the
drawings.
Are there deficiencies or omissions
in the drawings that require guesswork
based on the general contractor’s experience (or lack thereof)?
Have unit price allocations and allowances been clearly identified?
Are there any ambiguous or undefined
contractual terms and conditions that
may have a significant impact on financial risk and legal exposure?
Where there are inconsistencies, missing information, or ambiguity in the bid
package, it is essential to seek clarification in writing prior to submitting your
bid. Unless you have a high risk tolerance
for bidding “blindly,” if time doesn’t allow for clarification, you should consider
withdrawing from the bid process — or
your quote should include clear qualifications.
Risk Allocation and Contract Form
Embedded in Bid Documents
Best practice: general contractors
should be on the lookout for unexpected
provisions and documents referred to
or embedded in the bid documents. For
example, even though you may expect
to be provided with a formal contract
for negotiation and signature after
being selected as the low bidder, you
may be surprised to learn that you have
A simple review of plans and specs is not enough — dig deeper
and ask: Is the scope buildable based on what’s been provided?
already “negotiated” and “agreed”
to the formal contract — and all its
terms and conditions, both neutral and
unfavourable — embedded in the bid
documents. The time to be vigilant is
before you submit your bid.
More key questions to ask before
submitting a bid:
Is the form and substance of the
contract referred to or embedded in the
bid package? Will this be a fixed-price,
unit-price, cost-plus, or construction
management arrangement?
What contract form is expected (e.g.,
a standard industry precedent such as
CCDC-2, or a custom form)? If a custom
form, be extremely cautious and be sure
to understand all of its risk allocations
— it is almost certainly not favourable to
the general contractor. The same caution
applies to detailed supplementary conditions.
Are there liquidated damages clauses, force majeure clauses, or other
risk-shifting terms?
Are the conditions required to satisfy
the determination of a “proper invoice”
too expansive or too onerous?
Are there extended warranty provisions,
onerous indemnity clauses, and/or performance bonds that extend until the end of
the longest warranty period? For example,
until the end of the 7-year Tarion major
structural defects warranty period.
Bottom line: don’t price what you don’t
understand.
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28 the generals • SUMMER 2025
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